Related Links

Proposed sweep of reef fund progresses

Jeremy AlfordCapitol Correspondent

Published: Monday, April 29, 2013 at 8:37 p.m.

Last Modified: Monday, April 29, 2013 at 8:37 p.m.

BATON ROUGE — Despite opposition from the energy industry, a top business group, a recreational fishing association and the state Wildlife and Fisheries Commission, a House committee advanced legislation Monday that will sweep $20.6 million out of the Artificial Reef Development Fund.

But opponents to the move argue the fund will only have roughly $14 million in it when the administration makes its transfer, should the Legislature oblige, before the next budget takes effect July 1.

As a result, they predict Gov. Bobby Jindal’s administration intends to take all of the money out of the fund, leaving it at a zero balance until it gradually builds back up.

Michael DiResto, assistant commissioner of policy and communications for the Division of Administration, said late Monday the administration is not planning to adjust the figure of $20.6 million downward and is comfortable with the legislation as passed by the House Appropriations Committee.

The reef fund contains payments made primarily by oil and gas companies that are looking to save money by “reefing” a rig, rather than the costlier alternative of pulling it inshore to have scrapped.

Several conservation groups say they also support the rigs-to-reefs program, bankrolled by the fund, because it creates sustainable underwater habitats.

House Bill 452 by Appropriations Chairman Jim Fannin, D-Jonesboro, takes $519 million out of several dedicated funds like the reef fund to help balance the budget, chiefly benefitting higher education.

The committee approved the bill by a vote of 13-10 before endorsing the $24 billion state spending plan, Fannin’s House Bill 1.

For the remainder of the session, which ends June 6, the two bills will be closely connected in all coming budget debates.

Since the 2009-10 fiscal year, the administration has taken roughly $45 million from the reef fund.

The Louisiana Wildlife and Fisheries Commission, appointed fully by Jindal, is considering litigation over the past transfers, and the latest if approved, but members say the administration has offered to find a way to repay the money.

Negotiations are ongoing, although many have publicly admitted to being skeptical.

On the agenda for its next meeting May 2, the commission has included a discussion on the “prospective litigation” in executive session, meaning behind closed doors.

Commission members argue the money donated to the reef fund is not intended for other areas of the state budget, which could be the foundation for its potential lawsuit.

Rebecca Triche, executive director of the Louisiana Wildlife Federation, said another argument could be made that the money paid into the fund is protected by Louisiana’s guiding charter.

“The donations are made to the Conservation Fund, which is constitutionally protected,” she said.

The Department of Wildlife and Fisheries oversees the Conservation Fund, from which money for the reef fund is appropriated.

Several business interests turned up Monday to oppose the administration’s latest transfer proposal.

Gifford Briggs, vice president of the Louisiana Oil and Gas Association, said the fund is helping the industry deal with federal mandates related to removing so-called “idle iron” from the Gulf of Mexico.

“We can either bring it inshore at a really high cost or participate in the rigs-to-reef fund for fishermen and divers and people who enjoy the coast,” he said.

Mike Lyons, an attorney for the Louisiana Mid-Continent Oil and Gas Association, testified that the state has a unique program from a national perspective.

“This is a unique collaboration between the oil and gas industry and the state and the fishing community,” Lyons said. “We should be promoting something like this.”

Ginger Sawyer, director of energy issues for the Louisiana Association of Business and Industry, said her group is opposed to all of the governor’s proposed transfers because that takes money away from funds that were paid into by users for a specific purpose.

She added that has been her group’s stance since 2009, which she described as the “beginning of the sweeps.”

In an effort to guard against future raids, Sen. Bret Allain, R-Franklin, advanced legislation through the Senate Finance Committee last week that recreates the reef fund as a constitutional program.

It’s currently in state statute, making it easier for the administration and lawmakers to approve such sweeps.

If Senate Bill 128, a proposed constitutional amendment, is approved by the Legislature, voters will have their say on the Nov. 4, 2014, ballot.

It is being supported by the Coastal Conservation Association, Louisiana Oil and Gas Association and the Louisiana Wildlife Federation, among others.

<p>BATON ROUGE — Despite opposition from the energy industry, a top business group, a recreational fishing association and the state Wildlife and Fisheries Commission, a House committee advanced legislation Monday that will sweep $20.6 million out of the Artificial Reef Development Fund. </p><p>But opponents to the move argue the fund will only have roughly $14 million in it when the administration makes its transfer, should the Legislature oblige, before the next budget takes effect July 1.</p><p>As a result, they predict Gov. Bobby Jindal's administration intends to take all of the money out of the fund, leaving it at a zero balance until it gradually builds back up.</p><p>Michael DiResto, assistant commissioner of policy and communications for the Division of Administration, said late Monday the administration is not planning to adjust the figure of $20.6 million downward and is comfortable with the legislation as passed by the House Appropriations Committee.</p><p>The reef fund contains payments made primarily by oil and gas companies that are looking to save money by “reefing” a rig, rather than the costlier alternative of pulling it inshore to have scrapped. </p><p>Several conservation groups say they also support the rigs-to-reefs program, bankrolled by the fund, because it creates sustainable underwater habitats. </p><p>House Bill 452 by Appropriations Chairman Jim Fannin, D-Jonesboro, takes $519 million out of several dedicated funds like the reef fund to help balance the budget, chiefly benefitting higher education. </p><p>The committee approved the bill by a vote of 13-10 before endorsing the $24 billion state spending plan, Fannin's House Bill 1. </p><p>For the remainder of the session, which ends June 6, the two bills will be closely connected in all coming budget debates. </p><p>Since the 2009-10 fiscal year, the administration has taken roughly $45 million from the reef fund.</p><p>The Louisiana Wildlife and Fisheries Commission, appointed fully by Jindal, is considering litigation over the past transfers, and the latest if approved, but members say the administration has offered to find a way to repay the money. </p><p>Negotiations are ongoing, although many have publicly admitted to being skeptical. </p><p>On the agenda for its next meeting May 2, the commission has included a discussion on the “prospective litigation” in executive session, meaning behind closed doors. </p><p>Commission members argue the money donated to the reef fund is not intended for other areas of the state budget, which could be the foundation for its potential lawsuit. </p><p>Rebecca Triche, executive director of the Louisiana Wildlife Federation, said another argument could be made that the money paid into the fund is protected by Louisiana's guiding charter. </p><p>“The donations are made to the Conservation Fund, which is constitutionally protected,” she said. </p><p>The Department of Wildlife and Fisheries oversees the Conservation Fund, from which money for the reef fund is appropriated. </p><p>Several business interests turned up Monday to oppose the administration's latest transfer proposal.</p><p>Gifford Briggs, vice president of the Louisiana Oil and Gas Association, said the fund is helping the industry deal with federal mandates related to removing so-called “idle iron” from the Gulf of Mexico. </p><p>“We can either bring it inshore at a really high cost or participate in the rigs-to-reef fund for fishermen and divers and people who enjoy the coast,” he said.</p><p>Mike Lyons, an attorney for the Louisiana Mid-Continent Oil and Gas Association, testified that the state has a unique program from a national perspective.</p><p>“This is a unique collaboration between the oil and gas industry and the state and the fishing community,” Lyons said. “We should be promoting something like this.”</p><p>Ginger Sawyer, director of energy issues for the Louisiana Association of Business and Industry, said her group is opposed to all of the governor's proposed transfers because that takes money away from funds that were paid into by users for a specific purpose. </p><p>She added that has been her group's stance since 2009, which she described as the “beginning of the sweeps.”</p><p>In an effort to guard against future raids, Sen. Bret Allain, R-Franklin, advanced legislation through the Senate Finance Committee last week that recreates the reef fund as a constitutional program. </p><p>It's currently in state statute, making it easier for the administration and lawmakers to approve such sweeps.</p><p>If Senate Bill 128, a proposed constitutional amendment, is approved by the Legislature, voters will have their say on the Nov. 4, 2014, ballot. </p><p>It is being supported by the Coastal Conservation Association, Louisiana Oil and Gas Association and the Louisiana Wildlife Federation, among others.</p><p>Jeremy Alford can be reached at jeremy@jeremyalford.com.</p>